Tesla boosts car production with acquisition of German automated manufacturing firm Grohmann Engineering

Above: The radar technology of a Tesla Model S containing autopilot features is pointed out during a Tesla event in Palo Alto, California.

Image Credit: REUTERS/Beck Diefenbach

Tesla has announced a rare acquisition today, as the Palo Alto-based motor company revealed that it has snapped up European engineering company Grohmann Engineering. Terms of the deal were not disclosed.

Based in Prüm, Germany, Grohmann Engineering develops and supplies a range of automated production systems, including assembly lines, laser and bonding systems, liquid dispensing systems, and more. With plans to produce 500,000 cars per year by 2018, Tesla is looking to ramp up its engineering and manufacturing capabilities, which is what led the company to Grohmann’s door — Tesla wants “high-volume factories” to build cars at scale, which ultimately makes them more affordable.

“At very high production volumes, the factory becomes more of a product than the product itself,” said Tesla in a statement. “After increasing our output target to 500,000 cars per year by 2018, we began searching for the best engineering talent in automated manufacturing systems.”

Moving forward, Grohmann Engineering will now be called Tesla Grohmann Automation, and CEO Klaus Grohmann will join Tesla alongside his engineering team. “It will serve as the initial base for Tesla Advanced Automation Germany headquarters, with other locations to follow,” Tesla added. “We expect to add over 1,000 advanced engineering and skilled technician jobs in Germany over the next two years.”

As a result of this acquisition, Germany will serve as a key hub for Tesla, as “several critical elements” of its automated manufacturing system will now be housed in Prüm, complementing Tesla’s engineering bases in Michigan and California.

Tesla hasn’t made many known acquisitions since its inception in 2003, but it did recently snap up sister company SolarCity in a $2.6 billion deal, and last year it bought Michigan-based auto parts maker Riviera Tool. The Grohmann acquisition is still subject to approval from regulators, but Tesla says it hopes to conclude the deal in early 2017.

Tesla may be looking to ramp up its vehicle production, but yesterday the company announced that it would cease offering unlimited free supercharging on all cars ordered after January 1, 2017.